The decision by the FSA's Advisory Committee on Novel Foods and Processes (ACNFP) will now be referred to other European Union member states for further comment.
With the EU currently against the majority of GM use in food products over potential safety issues, a decision to approve ISP's could pave the way for the use of a number of similar technologies in formulation for products sold in Europe.
The ACNFP is a UK body in charge of ensuring all novel food products that enter the country are safe for human consumption.
Its decision will therefore be a major boost for Unilever, which had faced some opposition from anti-GM campaigners over its use.
ISPs are naturally occurring proteins and peptides found in living organisms such as fish, which protect their tissue from damage in very cold conditions, by modifying the size and shape of ice-crystals.
However, since it would be unsustainable to use proteins directly from the fish, Unilever developed a fermentation process where the GM yeast carrying the synthetic gene encoding for the ISP.
The European Commission stated earlier this year in a report that ingredients produced by fermentation using GM micro-organisms not present in the final product do not fall under GM food legislation - and therefore do not need to be labelled as GM products.
Although this applies to Unilever's ISP, the FSA's Advisory Committee on Novel Foods and Processes (ACNFP) had said this was a special case, on the grounds of "the use of a synthetic gene sequence and the presence… of a significant proportion of cellular by-products from the fermentation process such as yeast proteins".
It recommended at the time that consumers should be provided with information indicating that the ingredient is made using a GM yeast - either through information provided on food packaging or "via other easily accessible routes" .
Given that European public opinion remains largely opposed to GMOs, such information could potentially turn some consumers off the products.
Moreover, the novel foods application, required since the ISO was not commonly used in foods in the EU prior to 1997, has already caused considerable controversy with anti-GM campaigners.
Last July scientists working on behalf of pressure group the Independent Science Panel submitted their findings to the FSA that the health and safety risks that have not been taken into account.
The claims appear to have been dismissed by the ACNFP's following its latest decision to approve the product.
The transgenic protein has already been authorised in Australia, New Zealand, Chile, Indonesia, Mexico, the Unites States and the Philippines.
In addition to the GM labelling, the agency also said that products made using the ISP preparation should carry labels indicating yeast derivation, for the benefit of allergy sufferers.
Unilever attributed its ice cream brands such as walls as the key contributor to a four per cent rise in European sales volumes during the first fiscal quarter of 2007.